Latest updates

Art collectors' alert – landmark Supreme Court ruling on returning artworks illicitly exported to country of origin
LALIVE
  • Switzerland
  • 29 August 2019

Estimated at $67.4 billion, the art market has become a global playing field for ultra-high-net-worth and high-net-worth individuals to invest their assets. Yet, lack of harmonisation of national legislations on the protection of cultural property may hamper collectors' pleasure in moving their art around the world. In a recent decision, the Swiss Supreme Court clarified the requirements to be met by countries of origin when requesting the return of artworks allegedly illicitly exported by their legitimate owners, thus absent any issues of ownership.

Supreme Court identifies its jurisdictional limits to assist in trust arbitration proceedings
Lennox Paton
  • Bahamas
  • 29 August 2019

The Supreme Court recently clarified its jurisdictional limits to assist in trust-related arbitrations, ruling that it has no such jurisdiction to allow service outside an action's jurisdiction. Given this ruling, parties to trust arbitration agreements must be cognisant that, notwithstanding whether their trust deeds provide for the seat of any arbitration to be The Bahamas, the court can provide only limited assistance where the arbitration is not held and the parties or assets are not in The Bahamas.

Will the gift keep on giving? Office of Tax Simplification's inheritance tax review
Forsters LLP
  • United Kingdom
  • 22 August 2019

The Office of Tax Simplification recently published a report that made recommendations to the government to reform inheritance tax. The proposal that has received the most attention is the reduction of the period during which a lifetime gift remains subject to inheritance tax in the hands of the person making the gift (the donor) from seven to five years. A number of other changes have also been suggested – including in relation to agricultural property relief and business property relief.

Privy Council determines extraterritorial reach of clawback claims in insolvency proceedings
Lennox Paton
  • Bahamas
  • 22 August 2019

The Privy Council has determined that, notwithstanding the absence of express statutory provisions permitting service out of the jurisdiction of fraudulent preference claims, such claims are to have extraterritorial effect. This decision clarifies the law as it relates to the extraterritorial effect of fraudulent preference claims; however, it also creates difficulties for subscribers to mutual funds that may be held liable for investments made on behalf of third-party beneficiaries that are the ultimate recipients of payments.

Nuptial agreements and wealth protection
Forsters LLP
  • United Kingdom
  • 15 August 2019

Divorce can pose a significant risk to a family's or an individual's wealth. However, a nuptial agreement can reduce or mitigate such risk. A common perception of nuptial agreements is that they are designed to limit the extent of one party's financial claims. While they can be used in this way, their greater utility in this context is their ability to reduce uncertainty and therefore risk.

Important decision concerning confirmation of actions by improperly appointed trustees
Carey Olsen Bermuda
  • Bermuda
  • 15 August 2019

Bermuda's chief justice recently handed down an important decision dealing with the power of the court to intervene in the administration of a trust to approve actions of improperly appointed trustees. This case is important because it confirms the court's inherent jurisdiction, on the appointment of trustees, to grant them leave to administer the trust on the basis that they were properly appointed on a prior date.

Court of Appeal allows out of time inheritance act claim
Forsters LLP
  • United Kingdom
  • 08 August 2019

The Court of Appeal recently overturned a first-instance decision and confirmed that the plaintiff can make a claim out of time for reasonable provision from her husband's estate. The court disagreed with the first-instance decision that to allow this claim would amount to forced spousal heirship, as each case depends on its own facts and the specific application of the factors set out in the inheritance act.

Z Trusts judgment: whose rights take priority when a trust is insolvent?
Ogier
  • Jersey
  • 08 August 2019

The Jersey Court of Appeal recently handed down a long-awaited judgment in the Z Trusts case. The decision considers important questions regarding the equitable rights of former trustees and whether those rights have priority over the rights of other claimants to the assets of a trust (including successor trustees) whose liabilities exceed its assets. As such, trustees must consider the practical implications of this judgment and whether and how they should be mitigated.

New code of conduct for insurance brokers and agents
Carey Olsen Bermuda
  • Bermuda
  • 08 August 2019

The Bermuda Monetary Authority recently published the Insurance Brokers and Insurance Agents Code of Conduct. The code was developed in consideration of the international standards set by the International Association of Insurance Supervisors and is intended to assist the authority in providing appropriate, effective and efficient supervision and regulation of Bermuda-registered brokers and agents.

Revised PILA: setting the ground for trust arbitration in Switzerland?
LALIVE
  • Switzerland
  • 08 August 2019

While trusts have not been incorporated into the Swiss legal system, Switzerland ratified the Hague Trust Convention with effect from 1 July 2007 and adapted its conflict of laws provisions – in particular, Articles 149(a) to 149(e) of the Private International Law Act. As a result, foreign trusts are fully recognised and implemented under Swiss law. Although discussed controversially, legislative initiatives to introduce trusts into the Swiss legal system are ongoing.

Update to Bermuda's economic substance legislation
Carey Olsen Bermuda
  • Bermuda
  • 01 August 2019

A number of important updates to Bermuda's economic substance regime were introduced in June 2019. These include the recent enactment of the Economic Substance Amendment Act, which, among other things, excludes non-resident entities from the scope of the economic substance regime and modifies the provisions that govern the exchange of information. Further, the registrar of companies has issued guidance notes to help entities determine whether they fall within the economic substance regime.

Family links in estate and succession planning
Allgemeines Treuunternehmen (ATU)
  • Liechtenstein
  • 01 August 2019

This article addresses the rules and procedures that govern family links in the context of estate and succession planning in Liechtenstein. For example, in regard to marriage, if no special arrangement exists, the default matrimonial property regime is separation of property. However, marital agreements that establish a different regime can be entered into before and during marriage.

Should offshore trusts stay offshore – the long-term trust solution
Kozusko Harris Duncan
  • USA
  • 01 August 2019

The tax drag and unsatisfactory options to deal with accumulated income often result in moving an offshore trust to the United States and giving up the tax deferral. However, there is an alternative method, suitable for very long-term trusts, that takes an almost diametrically opposite approach. Rather than restricting the US beneficiaries to the value of the original trust capital and virtually giving up on future tax deferral, this method sacrifices the original trust capital to a final payment of taxes and interest (or a gift to charity) and tries to maximise the duration of the deferral.

Jersey Royal Court rules on its powers to restrict parties that withdraw trust proceedings to start afresh
Ogier
  • Jersey
  • 01 August 2019

The Jersey Royal Court recently ruled on the extent of its powers to restrict a party that withdraws proceedings to start afresh in a judgment that considered, for the first time, the implications of a 2014 English Court of Appeal decision on the public interest in there being finality in litigation. This is an important decision for maintaining the public interest in the finality of litigation and the efficient administration of justice.

Should offshore trusts stay offshore – the problems
Kozusko Harris Duncan
  • USA
  • 25 July 2019

US beneficiaries of foreign trusts are subject to a throwback tax regime and an interest charge when they receive distributions of accumulated income from the trust. To avoid these punitive payments, families often choose to convert or decant the trust to a US domestic trust. However, the easy answer may not be the best answer, as a trust that tries to rebound from an ill-considered move to the United States may face a tax on the way out – a toll charge that precludes returning offshore.

Capacity and power of attorney
Allgemeines Treuunternehmen (ATU)
  • Liechtenstein
  • 25 July 2019

This article addresses the rules and procedures governing capacity and power of attorney in Liechtenstein. Capacity is determined according to the Law on Persons and Companies and, as a general rule, every person enjoys capacity if they are of age and sound judgement. A minor who is under the guardianship of their parents has the same limited capacity as a person who is placed under disability.

Regulation in Guernsey – what happens when it goes wrong
Ogier
  • Guernsey
  • 18 July 2019

This article has been removed at the request of the contributing firm.

Wills, probate and inheritance
Allgemeines Treuunternehmen (ATU)
  • Liechtenstein
  • 18 July 2019

This article addresses the rules and procedures governing wills, probate and inheritance in Liechtenstein. For example, a distinction is made between testate and intestate succession. The rules on intestate succession apply when a person dies without leaving a will, whereas testate succession is determined based on a will to which Liechtenstein applies the right to a compulsory portion.

New tax reforms in effect
Lennox Paton
  • Bahamas
  • 18 July 2019

In the 2019/2020 Budget Communication the government announced various tax reforms which came into effect on 1 July 2019. Among other things, the cap on owner-occupied property has increased from B$50,000 to B$60,000 per year and stamp duty on real property has been replaced by value added tax (VAT) at the same rates. Further, any party that is required to become a VAT registrant must have a business licence.

Tax benefits for foreign nationals
A G Paphitis & Co
  • Cyprus
  • 18 July 2019

Cyprus offers a number of tax incentives to high-net-worth individuals. For example, foreign nationals who earn €100,000 per annum from employment in Cyprus are eligible for a 50% tax exemption on their income irrespective of the status of their tax residency or domicile. Further, Cyprus is party to more than 65 tax treaties, which allows it to charge zero or minimal withholding tax rates on incomes such as pensions, royalties, dividends and interest received from abroad.

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